House debates

Wednesday, 18 June 2014


Family Assistance Legislation Amendment (Child Care Measures) Bill 2014; Second Reading

11:25 am

Photo of Sussan LeySussan Ley (Farrer, Liberal Party, Assistant Minister for Education) Share this | Hansard source

In summing up, I thank all the speakers on the Family Assistance Legislation Amendment (Child Care Measures) Bill 2014 for their contributions to the debate. I want to reiterate that this government is committed to making child care more affordable, flexible and accessible for Australian working families. I want to start by making something very clear to address so much of the misinformation from Labor members during this debate. Overall, this government is increasing, not cutting, childcare assistance to $28½ billion over the next four years to assist around a million families each year through the childcare benefit and the childcare rebate.

The proposed amendments to the Family Assistance Legislation Amendment (Child Care Measures) Bill will do two things: maintain the childcare benefit income thresholds for three years and continue to pause the childcare rebate limit at $7,500 per child per year for a further three years. Both of these measures will apply from 1 July 2014 for three years to 30 June 2017. It is fiscally responsible for this government to maintain, not cut—as the member for Adelaide would have you believe—the current CCB income thresholds, along with the current CCR annual limit, pending the outcome of the Productivity Commission's inquiry into child care and early learning in October 2014. The terms of reference for this broad ranging inquiry include consideration of rebates and subsidies for child care. The draft report will give us the first insight into their proposed reforms and is due next month.

The measures contained in this bill are, however, moderate and necessary. The Senate Education and Employment Legislation Committee noted:

… the committee is persuaded that these measures are limited, well targeted and for a finite period of time, and are a necessary part of the broader government agenda of repairing the budget and strengthening the economy.

The government is making decisions that will prepare Australia for the long-term challenges and opportunities that confront us. The childcare benefit measure in this bill is a 2014-15 budget measure and is one element of the government's broader measure to maintain eligibility thresholds for Australian government payments for three years. Maintaining the childcare benefit income thresholds will provide an estimated saving of $230 million over the forward estimates. Childcare benefit eligibility requirements will remain unchanged. This is not a cut. The government will continue to index—that is, increase the childcare benefit standard hourly rate, increase the minimum hourly amount and the multiple child loadings by the consumer price index on 1 July each year. It is important to note that the out-of-pocket costs incurred by most families because of the childcare benefit measure will be reduced by the childcare rebate, which is not income tested and which covers up to 50 per cent of out-of-pocket childcare costs, up to $7,500 per child per year.

The childcare rebate indexation pause at $7,500 was first implemented by Labor in 2011. Labor announced an extension of the measure as part of their 2013-14 budget and then took the $105 million in savings from the budget bottom line but never legislated for it. When this government sought to legislate the measure, Labor combined with the Greens in the Senate earlier this year to block the legislation that would have given effect to their own measure. So I welcome their apparent change of mind. It is very good to see that the opposition is no longer opposed to their own measure. The CCB measure will not impact families with incomes below $41,902, which is the lower income threshold for childcare benefit. These families will continue to receive the maximum rate of childcare benefit. Families with incomes above $41,902 will continue to receive CCB. The amount of CCB a family receives tapers to zero as their income increases to the relevant maximum income limit. The CCB measure in this bill ensures the payment is fair and sustainable in the longer term for families who need it most. And I want repeat this, because families need to be aware—despite the broad-brush accusations of the opposition—that the hourly and weekly rates of Child Care Benefit will continue to be indexed—that is, to increase. This means that, per hour, the amount of Child Care Benefit that families receive will in fact continue to increase.

A number of members opposite referred to the Productivity Commission's inquiry called by this government. We actually called for it in opposition, but it was never supported by Labor. They have talked it up today—and I am delighted that they have—but they never, ever supported its inception. As I have said, the measures in this bill do not in any way pre-empt the Productivity Commission inquiry into child care and early childhood learning, which is a holistic review into what is needed for the next generation, not just for the next few years. We are maintaining the current CCB income thresholds, along with the current CCR annual limit, pending the outcome of the Productivity Commission's inquiry, which will report finally in October of this year. As part of its broad-ranging review, the PC is looking into the rebates and subsidies available for each type of care. The inquiry's fourth term of reference specifically asks the commission to look into:

Options for enhancing the choices available to Australian families as to how they receive child care support, so that this can occur in the manner most suitable to their individual family circumstances. Mechanisms to be considered include subsidies, rebates and tax deductions, to improve the accessibility, flexibility and affordability of child care for families facing diverse individual circumstances.

Thousands of submissions and comments have been received, and a number of them have highlighted just how complex these payments are for families and service providers alike. So I really do look forward to the Productivity Commission's draft report next month. But the CCB and CCR measures in this bill are moderate and necessary measures for this time.

Of course, I would have preferred that we, coming into government, did not have to make these changes. Of course, I would have preferred that we did not inherit a budget disaster from Labor which needed urgent action to repair it. Of course, I would have preferred not to be standing here today to sum up a bill that brings in sensible, moderate measures to repair the budget. These are choices that the Liberal and National parties, in government, have been forced to make—by the budget mess left to us by Labor.

We know that Australian families need flexibility. We know that our Productivity Commission inquiry is going to deliver some real, valuable and terrific policy ideas for the next generation. I am delighted that the Productivity Commission will look at the options for the future, within the current funding envelope. I remind the House that the Productivity Commission inquiry is a broad-ranging one, and that one of its terms of reference is to look at the current and future needs for child care in Australia, including the consideration of a number of factors such as the 'types of child care available including but not limited to: long day care, family day care, in-home care including nannies and au pairs, mobile care, occasional care, and outside school hours care'. I make that point because a number of members opposite have highlighted in their speeches the difficulties that they themselves have experienced in finding child care. They have highlighted the difficulties that their constituents face, and they have highlighted the frustrations of not finding the right child care, in the right place, at the right time, and for the right cost. We definitely want to reiterate our commitment to solving this problem. We came into government and inherited a childcare system that, if not completely broken, was certainly heading in that direction. The urgent action that we are taking in terms of repairing the budget is something that will set our economy on a good footing for the next generation. Our inquiry will look at innovative ideas for policies in child care.

I do want to mention something else that a number of those opposite talked about, which is cuts to the Jobs, Education and Training Child Care Fee Assistance—wrong. The program is currently uncapped as to how much parents can claim. Labor's inaction has seen the JETCCFA budget blow out by over $50 million in the past two years. The Australian government is introducing two key changes commencing on 5 January next year: a maximum eight-dollar hourly cap for Jobs, Education and Training Child Care Fee Assistance, and a 36-hour weekly limit per child to payments to recipients who are undertaking study. The average childcare hours used by all families working or studying is around 24 hours a week, and the average hourly fee for all families is $7.65 per child—so most families will find no change to their current situation. For example, with the average childcare hours used by all families working or studying being around 24 hours a week, the 36-hour weekly limit will mean no change to most families' current situations. We are introducing these changes to better manage expenditure and to ensure that recipients are accessing the program in the most cost-effective way. We want to ensure that JET fee assistance is available for as many income support families as possible, to enable them to get the skills they need so that they can secure jobs now and into the future.

The member for Adelaide spoke of what she termed as 'cuts to family day care'—and I do need to mention this because she was, in fact, the minister during 2012, when an audit of the Community Support Program by the Australian National Audit Office found approximately 71 per cent of CSP funding was being allocated to family day care—which accounted for approximately 10 per cent of all children in care. The ANAO recommended that the program's eligibility criteria be reviewed but, typically, Labor did nothing. So the member for Adelaide knows that the program was unsustainable; she knew it in government, but did nothing to repair the situation when she had the chance. She squibbed her responsibilities and now sits on the other side and criticises this government for what we are doing to fix Labor's mess.

Labor has no credibility on child care. The promises that they made never came to fruition. In fact, childcare fees skyrocketed by 53 per cent under Labor—that is, around $73 extra a week in fees for a family using the average hours of child care. In case members opposite say, 'oh yes, but that is before you factor in the subsidies to parents for the Child Care Rebate', let me make the point that out-of-pocket costs went up 40 per cent during that time. That in itself is a disastrous legacy to leave Australian families. The hypocrisy is breathtaking. I know that is a phrase we hear a lot in this House, but in fact, in this case, their hypocrisy is breathtaking. We will soon see that the Labor Party will oppose this bill—this bill that is designed to repair a budget disaster that they left us with. But in this bill is a measure that they in fact announced in their budget but from which they took $106 million in savings, and they assumed that cut would happen. They will sit here and oppose their own measure, which in itself is extraordinary, because Labor members speaking on this bill have been hysterically wrong in so many instances. They say 'You are making cuts', 'You do not care', 'You are not interested', 'Children do not matter', and so on—there has not really been a rationale presented by members opposite for why we would do these things.

In the battle of ideas, there are often competing ideas. You might have different ideas about a range of philosophies and policies, but no Labor member has actually accused us of having a different idea. All they have accused us of is making cuts, and the reason is that they know the only rationale, the only reason, why we are doing these things is that we have no choice in the context of the budget that we have inherited. Labor just make up stories and scaremonger. Those listening to this debate may think that the amount of childcare benefit they receive for their children, the hourly amount, is going down, when in fact it is going up, because all we are doing is freezing thresholds. They might think that the amount of childcare rebate they can claim is going down, when in fact we are pausing the threshold. We are pausing these thresholds for three years to take the moderate, sensible action that we need to to restore the national accounts of this country.

As I said, we have a plan, we have an agenda, we have ideas and we understand the landscape in which we exist and in which we work. We understand what parents need. We know that our Productivity Commission inquiry is going to look after those needs for the next generation. The accusation by a Labor Party that did not even support that inquiry of not waiting until that inquiry report is in, unfortunately a few months from now, fails to understand that this action is being taken in order to repair the budget and that means that we have a limited choice.

I want to commend this bill to the House, I want to reiterate that the childcare rebate measures in this bill are in fact Labor's own measures. They are Labor's own measures. They need to own up, they need to stand up and they need to say 'we will support this part of the bill.' If they oppose this whole bill, then they cannot be taken seriously as a responsible opposition. If they oppose this whole bill, they are effectively opposing something they introduced themselves, and from which they took $106 million in savings to try, desperately, to provide that economic fig leaf of credibility that they had lurched to the last election with. How dishonest; how meaningless. It is absolutely appalling that Labor would not recognise that they in fact own half of the legislation that is being presented today. I commend the bill to the House.


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